Federal Tax Credit Information - The new federal scholarship tax credit (section 25F of the Internal Revenue Code, effective Jan. 1, 2027) will provide a dollar-for-dollar credit against individual income taxes for donations to qualified scholarship-granting organizations (SGO) that award scholarships for tuition and other eligible education expenses. We are awaiting final rules and will have more information when that process starts. For now:

• 100% non-refundable tax credit for donations from individuals to qualifying SGOs

• Tax Credit limit: $1,700 per donor

• Student eligibility: 300% area median income

• Program length: "Permanently" enshrined in tax law, i.e., no sunset date.

• No aggregate/national cap on available tax credits.

• Every state has the opportunity to participate, but must opt in. Texas Gov. Greg Abbott has pledged to opt in.